Trying to figure out how to hire someone, who to hire, or decide if you even need to? I've got all the tips about making your first hire right here!
Making your First Hire!
Want to listen to the podcast version of this post? I’ve got you covered!
I’m really excited to talk about making your first hire, because it’s something that I had a lot of confusion around myself. I saw other people in the online space posting job applications, and I had no idea if they were hiring a contractor, a full-time employee, or what.
For a long time, I didn’t know if I should have a contractor or employee. And I’ve been through all of it! I had my very first VA back in 2015 for very minimal hours per month, and since then I’ve had multiple VA’s, contractors, and OBM’s. Hopefully I can bring some expertise to this conversation!
The Difference Between an Employee and a Contractor
This is information that I need to explain before we go into all the details here.
Contractors are people who are paid “on contract.” You contract them for a certain number of hours, a specific project, or a specific job. They set their own hours and their own hourly rate, and they will bill you for their services. They are likely doing that same service or a similar service for other people.
This would be anyone who is a VA (virtual assistant), an OBM (organizational business manager), a graphic designer, or things like that. They will send you an invoice every month or one for the job at hand and they are in charge of their own taxes/all of the accounting stuff.
Contractors are where most people start when they go to hire. It’s really easy to get someone for a minimal amount of hours instead of a 20 or 40 hour per week job. When you’re in the beginning of your business, you might not be able to budget for someone to work 20-40 hours per week. And you might not even have enough work to give them to take up that much time!
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Contractors can be a GREAT alternative to a traditional employee. I will say that there are some different laws governing contractors that some states are much stricter on than others. California, for example, is much stricter on the contractor vs. employee distinction. That’s why Uber and Lyft were fighting with the state of California over the classification of their drivers.
As far as basic legalities go, a contractor will bill you and then you pay them. At the end of the year, if you pay a contractor over $500 for the year, you then have to submit a 1099 filing for that relationship.
Now, there are some confusing loopholes here – that I have no clue about. You should definitely talk to your CPA or accountant about it! But generally speaking, you don’t take out taxes for contractors. It’s like you hiring someone to mow your lawn: you pay them when they do the job, not regularly.
In addition to the payment differences, you cannot dictate how or when a contractor works. With an employee, you can say that you want them on the clock from 8:00-5:00 everyday. Contractors work on a job or hourly basis. You can’t tell them that they have to be on the clock at certain hours, because you aren’t in charge with them in that way. That can be a bit of a problem if they’re in a different time zone, or if they have specific hours that are very different than yours.
Let’s dive into employees now, because they're different! You can have either part-time or full-time employees. When you have an employee, you take their taxes out, pay payroll taxes, take out social security – all of those things. Again, that is a hard stop on my knowledge in that arena.
I will say – if you already have yourself set up on payroll through something like QuickBooks, it is really easy to integrate an employee into your payroll. When I say really easy… it’s not that easy. There was a lot of random crap I had to set up to be able to bring myself on as an employee to my company. There was a LOT of paperwork!
I remember telling my assistant at the time, Maegen, that I realized why people never set up their payroll. It was difficult! But once you have yourself set up on payroll, it’s a lot easier to add other people.
If you are not on payroll from your company and you are just pulling money in whenever you want to (which was me for a long time), it’s harder to hire on a full-time employee.
Get set up as quickly as possible to pay yourself, because that will position you in a way that makes it easier to add your first employee, even if it’s years from now.
How do I choose between an employee and a contractor?
The two biggest things to consider when making your first hire and deciding their role is 1) budget and 2) what you need.
If I need a video editor and I only have $400 per month to spend on an editor. That would give me about 10 hours per week from a part-time employee, or I could pay a contractor. I may not be able to afford an employee with that money, but paying a contractor would work out.
There is a LOT of responsibility that comes with having an employee. You are the person in charge of paying their payroll. Their livelihood is dependent on you having the money there to pay them, which can be scary. Don't make the jump to employee before you're financially ready. If that feels scary, then I would probably go with a contractor.
I can give you some insight from my experiences here. When I need someone in the tactical realm providing FULL support in my business (with inbox management, sponsorship management, everything), a VA works really, really great. And there are hundreds of thousands of people who offer those services. They are a really good hire when you want to hand off tasks.
If they’re a contractor, they will just bill you for services and you don’t have to worry about payroll. Second, they’re likely already familiar with the work that you’re hiring them to do. Third, they’re generally more efficient. While they may charge more per hour than if you went to find a college student to train, they can get more done in that hour.
In my experience, a contractor is great when there’s an actual task-based thing in your business that you need someone to do.
The problem comes in when I need someone to manage my business. I have had a LOT of failed OBM attempts.
My (failed) experiences with OBMs
An OBM is an organizational business manager. In my head, you are the vision for your company. And you spit the vision (ew, a gross metaphor) down to the OBM and they are the ones who put the pieces in place to make it work. Structurally, you’re looking at you at the top, an OBM (or integrator or manager) right underneath that, and then either them being in charge of the tasks OR having other contractors or employees underneath the OBM to execute projects.
THAT is where I need the most help and where I’ve had the most trouble with contractors. Like I said, I’ve just had a bad time with OBM’s in the past. It really comes down to them not being dedicated to my business. They have other clients, and I can tell that their dedication is spread out. And I understand that from the OBM’s perspective because they need to make sure they prioritize other clients, but I think the ball can be dropped really easily.
I’m not saying that there aren’t amazing OBM’s in the world – I know that there are some really awesome business managers out there. In my experience, I haven’t had good luck with that role and my expectations of what it should be.
There have been a couple of times where I had an OBM in that role and I didn’t feel like I was ever a priority. It took a long time to accomplish tasks and balls were dropped. My last experience with an OBM before I hired my full-time assistant is that they ghosted me and never did anything I paid them for.
Once I realized that this was happening, I went back to them with a list of five things they needed to get done within the final month of the invoice I had already paid. I told them I expected those five things to be finished by the end of the contract, and they never got them done. Ever.
I paid two months for someone to talk to me on Voxer a few times and send 10 emails. Which is a REALLY bad experience and an expensive mistake. And I will say, on the first day with my new assistant, we got ALL of those things done.
When you need tasks done, a contractor is a great place to start. When you need that management piece, you should move into an employee, whether they’re part-time or full-time. As long as they’re dedicated to your business during those hours, I don’t think the time matters.
How do I know when I’m ready to hire?
You’re ready to hire when freeing up some of your time would also lead to more money, more projects that can accomplish, or more sanity for you. And there’s also the budgeting aspect. There are some people who are willing to take on less money themselves to hire because they know that will enable them to grow. Others need to bring in a certain amount before they bring someone in.
Once you have the budget to be able to pay that contractor’s fee and feel like you need help, you’re ready to hire! Even if you aren’t sure exactly what you need help with yet. If you’re drowning, HIRE.
How do I figure out what I should hire out?
Write down all of the things that you do. If you’re a solopreneuer, that looks like managing social media, creating graphics, writing emails, creating content, setting up systems, sending invoices, editing things, uploading things, calendar links… ALL THE THINGS.
After you’ve written down everything you do in your business, I would take two different colored highlighters and start highlighting things in two categories.
One category are things that take you a LOT of time. Right now for me, that’s editing my videos. I took back my editing for several different reasons, and I’m okay with it right now. But I know in the future that I’m going to need some help there.
The other highlight color is dedicated to the things you HATE to do. When you have to do them, you just do NOT want to do it.
Sometimes, those categories will overlap – and that’s where you should start hiring out your tasks. If editing my videos takes a lot of time and I hate it, then it’s the next thing I should hire out.
My First Experience Hiring a VA
When I hired my first VA, it was for someone to edit and upload the All Up In Your Lady Business podcast when I was co-hosting it. We were doing everything ourselves and we were new. Jaclyn Mellone, my co-host, was brand new, and I had been in business for four years but I didn’t have extra money to spend.
I was in charge of the tech side – making graphics, the website, editing and uploading the podcast. Jaclyn was handling sponsors, booking guests, and sending out pitches. I went to her and told her that the very first dollar we made needed to go toward hiring someone to manage the podcast because I was going CRAZY trying to edit and upload it. We were doing three episodes per week at the time, which is bananas.
I knew I needed that help first because it took so much of my time and I absolutely LOATHED it.
When you’re looking at your list, see if there are things that overlap in both categories. Hire out those tasks first. If it’s something that will cost you a lot of money, save for it, but it needs to be your first hire.
If there’s nothing that overlaps, then ask yourself what will benefit you more. Is it better for you to get the three things you hate off of your list, or three things that take you the most time?
I LOVE video editing, but because it takes me so much time, it’s something I need to outsource. Even though it hurts my heart a little. That is my next hire, hands down.
Truthfully, I would almost always pick the items that take you the most time to hire out. Time is an invaluable resource, and you having more time on your calendar is SO incredibly valuable. Giving yourself time to be more visionary is worth the time.
How do I get the word out that I’m hiring?
If you have decided to go the contractor route, I would highly encourage you to join Virtual Assistant Facebook groups, or join Facebook groups with other business owners. There is a group called the Virtual Savvy by Abbey Ashley where people can post jobs. Start there and let your budget and people’s skillsets lead you.
Hiring a Contractor
Let me back up a little – I have never, ever, hired a VA that I didn’t train. That means it cost me way less money to hire. If you’re looking at someone to edit a podcast, they’re a podcast editor. They will want to edit out the uhms, balance the sound, and do super techy stuff to the podcast. When Jaclyn and I were hiring, we knew we didn’t care about that stuff! We just wanted someone to add the intro and outro, possibly an ad, export it and be done.
So we didn’t want to pay a podcast editing expert to do that job! I put out a call for someone looking to learn those skills when I hire VA's. Then, I teach them, and they are on my team. The first VA I had was a girl I knew from high school who was on my team for a little longer than a year. She was so, so good. The second VA I had was another girl that I knew from high school who was also amazing. When she left my team, I was so sad because she was fantastic. She had the skills to be in a management position and do super well. But she decided to take a full-time job and shut down her VA agency.
But I was paying them less money because I had trained them. That was sort of our agreement. I’m going to train you, and I’ll pay you $10-$15 per hour and then you can go get more clients with these skills. For me, that was worth it. And it helped me understand how to best train people
If you want to hire someone locally as a contractor, that can be a great strategy. Look for someone who wants to get started in social media management, train them, and you can pay them slightly less. Then, they can get more clients and charge whatever rate they'd like.
Hiring a virtual assistant who already has those skills is going to cost you more. VA’s typically make between $30-$60 per hour, depending on their skillset. That can be A LOT, especially starting out. THere’s no way we could have paid our first VA $30 an hour back in the beginning.
Hiring an Employee
If you’re wanting to hire an employee, you need to ask: do you want to hire someone locally or remotely? If you want to hire remotely, you’ll have a much bigger pool of applicants. Odds are, the salary will be higher, and the expectations will be more.
Most of the people paying attention to online business postings already have a business and will expect a certain rate.
I generally think you can train someone locally for cheaper when you’re starting out. I don’t mean to say that you shouldn’t pay your local people. But, they can start at a lower rate because they likely don’t have the skills you’re hiring for.
When you’re deciding local vs remote, ask yourself if you’ll ever need this person in person. Do you need someone who could run errands for you, to help you film, or something else? It’s also really important to me that I pour into my local economy. I’ve talked about this before, but there just aren’t any jobs locally, especially that pay well or have a positive culture. I have a passion for creating local jobs, so I want to hire locally. And for me, that usually means I have slimmer pickings. This time it worked out for me!
How do I know what to look for in someone I’m hiring?
Knowing what to look for when making your first hire depends heavily on 1) the position and 2) on you!
Hire someone who complements your strengths!
I was looking for an overall executive assistant to move into a business manager role in the future. Because I’m a scatterbrained disaster, I know that I need someone who is almost anal-y organized. They needed to be a self-starter, can pick up technology quickly, and that I could teach easily. Teachability is a big thing that would be the case for all positions I hire.
I knew that I didn’t need anyone who was a 3 or 9 on the Enneagram, because I already have those traits. Someone who was a 1 on the enneagram would be great for me. My assistant is a 2w1, which works out great.
I also paid close attention to the Myers-Briggs test on applications. I am an ENFP, which basically means I’m a DISASTER and my brain looks like a crazy place. From working with contractor’s in the past, I knew I needed someone with those J characteristics on the enneagram. And Laura is an INFJ.
I asked on the application if they had ever taken personality tests, and they could answer. From there, I could tell how much they were compatible with me and what I needed.
Again, every position is going to be different! For an editor, I would care more about their creative eye and attention to detail.
Knowing yourself and your holes will help you figure out what to look for when hiring!
Obviously, looking for someone who has the skill sets you need in the role is a great benefit, too. If you’re hiring an editor who already knows how to use Final Cut Pro or Adobe Premiere Pro, then that’s a plus. And, you’ll likely have to pay them more starting out).
What do you call the position?
This is a question I get asked a lot – and guys, don’t get stuck in the weeds! The name of the position can always be changed. Call it what you want to call it and go on about your day.
How do I publish a job application?
Go the easy route – use Typeform or Google Forms.
I have always used Typeform because it allows me to ask all kinds of questions and it looks pretty. You can collect other information from them later – you don’t need their social security number and other stuff like that on the job application.
Come hang out with me over on Instagram, @jessicastansberry, and ask me any other questions you have about making your first hire!